Custom Duty

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CUSTOM DUTY

Customs duty is a duty or tax, which is levied by Central Govt. on import of goods into, and export of goods from, India. It is collected from the importer or exporter of goods, but its incidence is actually borne by the consumer of the goods and not by the importer or the exporter who pay it. These duties are usually levied with ad valorem rates and their base is determined by the domestic value ‘the imported goods calculated at the official exchange rate. Similarly, export duties are imposed on export values expressed in domestic currency There is historical evidence of imposition of import duty during the ancient and medieval era, the development of organised taxation on imports and exports to its present form, originated in 1786, when the Britishers formed the first Board of Revenue in Calcutta. In 1808, a New Board of Trade was established. The provincial import duties were replaced by uniform Tariff Act through Customs Duties Act, 1859 which was made applicable all territories in the country. The general rate of duty was 10%, which was subsequently revised to 7.5% in 1864. Several revisions in the Customs policy and tariff took place during subsequent years, though such revisions were mainly related to the textile products. Sea Customs Act was passed by Government in 1878. The Indian Tariff Act was passed in 1894. Air Customs having been covered under the India Aircrafts Act of 1911, the Land Customs Act was passed in 1924. The Indian Customs Act, 1934, governed the Customs Tariff. After Independence, the Sea Customs Act and other allied enactments were repealed by a consolidating and amending legislation entitled the Customs Act, 1962 (CA). Similarly the Act of 1934 was repealed by the Customs Tariff Act, 1975(CTA). THE CUSTOMS ACT, 1962

The Customs Act 1962 is the basic Act for levy and collection of customs duty in India. I contain various provisions relating to imports and exports of goods and merchandize as well as baggage of persons arriving in India. The main purpose of Customs Act, 1962 is the prevention of illegal imports and exports of goods. The Act extends to the whole of the India. It was extended toSikkim w.e.f. 1st October 1979. THE CUSTOMS TARIFF ACT, 1975

The Customs Duty is levied on goods imported or exported from India at the rates specified under the Customs Tariff Act, 1975.The Act contains two schedules - Schedule 1 gives classification and rate of duties for imports, while schedule 2 gives classification and rates of duties for exports. In the present Act, the Tariff Schedule was replaced in 1986. The new Schedule is based on Harmonised System of Nomenclature (HSN). The Internationally accepted Harmonised Commodity Description and Coding System. The customs duty is levied, primarily, for the following purpose: 1. To raise revenue.

2. To regulate imports of foreign goods into India.
3. To conserve foreign exchange, regulate supply of goods into domestic market. 4. To provide protection to the domestic industry from foreign competition by restricting import of selected goods and services, import licensing, import quotas, and outright import ban.

NATURE OF CUSTOMS DUTY:
Entry 82 of List-I (Union List) to the Schedule-VII reads as under 82 ‘Duties of Customs including Export duties’. Thus, the levy of duty on imports and exports is subject matter of Union and the parliament derives power to make laws related to the duties of customs. Accordingly, the Customs Act, 1962 was enacted by the Parliament. Section 12 of the Customs Act provides that duties of customs shall be levied at such rates as may be specified Under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into or exported from’ India. Goods become liable to duty if there is import into and export from India. TERRITORIAL WATER OF INDIA:

Territorial waters mean that portion of sea, which is adjacent to the shores of a country. As per section 3 of the Territorial...
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